So the Chinese are benefiting from AGOA

By | December 19, 2012

Of course they are:

paper from the Centre for the Study of African Economies suggests that savvy Chinese companies have set up shop in Africa as a route to get their products into the US, with the added incentive of all those juicy AGOA benefits.

The logic is impeccable. Not only does an Africa platform get them duty-free access to US markets; they can also avoid punitive quotas on China’s exports, imposed under previous protectionist measures enacted by the rich world such as the Multifibre Arrangement.

 And even during that whole MFA thing, Chinese companies were producing in Africa so they could export as products from African countries. Which was one of the reasons that it looked like textile industries in some African countries were doing OK. Once the MFA expired, after a few years of which China joined the WTO, there was no longer any need for them to export from Africa. I wrote about all that a couple of years ago here, touching on the AGOA bit, especially as it affected (or not) textile. An excerpt:

Before the MFA expired, the United States introduced the African Growth and Opportunity Act (AGOA), an initiative that opened up the American market to African countries. Before the expiration of the MFA, textile products were one of the fastest growing exports to the US under AGOA. However, by the time the quotas were lifted, Chinese exports [exported from China] increased rapidly and proved to be stronger competition than African companies could handle. According to a 2005 presentation made to the US-China Commission by Princeton Lyman, a former United States ambassador to Nigeria, African countries suffered from the increase in exports from the Chinese textile industry on two fronts. Cheap exports from China were undermining local textile industries. At the same time, the growth of Chinese exports to the United States was making it almost impossible for African countries to compete with China for the US market.

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